Sahara Refunds: Did the SC Want SEBI To Sit on Rs15,448.67 Crore for a Decade?
On 31 August 2012, the Supreme Court of India (SC) handed down a historic verdict asking two Sahara companies to refund over Rs20,000 crore to investors that was illegally raised through quasi-debentures without regulatory clearance. High drama continued even after the verdict with the Court enhancing Sahara’s repayment to Rs25,700 crore in 2015. Subrata Roy also spent over two years in jail for contempt of court. He remains out on bail. The Court directed the Securities and Exchange Board of India (SEBI) to identify investors of the two Sahara realty firms and refund the money under the supervision of justice BN Agrawal, a retired Supreme Court judge. That was nine years ago!
 
In February 2020, the minister of state for finance told parliament that the Sahara group has deposited only Rs15,448.67 crore with the ‘Sebi-Sahara Refund’ account, of which it has been able to refund only Rs109.86 crore to 14,146 applicants who came forward with legitimate documents. Since then, it has paid out a little more. 
 
While SEBI cannot find investors of the realty companies, lakhs of genuine investors are coming forward from all over the country demanding payment. They were lured to invest in the controversial group through four giant cooperative societies spread across India. Many have a genuine claim to the money collected by SEBI, but the regulator is sticking to a narrow definition of what the Supreme Court has ordered and making no effort to help investors who were duped. Sahara investors are holding protests across India, through social media (#JusticeForSaharaInvestors) and some have even ended their lives in desperation. Innumerable police complaints have been filed all over the country; but Sahara is not making any payments.
 
Surely, it was never the SC’s intention that SEBI would sit over investors’ funds for a decade while complaints mount and an equitable solution needs to be found?
 
The plight of lakhs of investors spilled into the public domain in September 2020 through an explosive letter by Vivek Aggarwal, central registrar of cooperative societies (CRCS) who said that the group had raised a stupendous Rs86,673 crore over 10 years (from 2010) from around eight crore depositors and was unable to repay them. The money was raised through four multi-state cooperative societies registered across India—Sahara Credit Cooperative Society Ltd, the Saharayn Universal Multipurpose Coop Society Ltd, the Humara India Credit Coop Society Ltd and the Stars Multipurpose Cooperative Society. Mr Aggarwal had called for an investigation by the serious frauds investigation office (SFIO). (Read here: Sahara’s Mysterious Riches: Rs1,10,000 Crore Raised in 10 Years despite Intense Scrutiny of Government, Supreme Court and SEBI)
 
 
Many investors approached Moneylife after our articles in October 2020 (Read: Sahara Pariwar: Mysterious Riches, Tall Claims and Struggle To Repay). Moneylife Foundation, our not-for-profit organisation, collated and verified information from over 400 investors based on Sahara’s promise to pay. But the group paid only Rs39 lakh to 18 investors and then reneged on its commitment. 
 
Moneylife Foundation Appeal to SEBI in January 2021  
On 30 December 2020, Moneylife Foundation wrote to the SEBI chairman and justice BN Agrawal taking forward the facts stated by Vivek Aggarwal, the CRCS, in his letter dated 18 August 2020. The letter mentioned how Sahara Credit Cooperative Society Ltd (Sahara Credit), which has raised deposits of Rs47,245 crore, had provided an advance of Rs2,253 crore to Subrata Roy which was transferred to SEBI as money collected by the Sahara realty companies. Hence, at least this sum of Rs2,253 crore belongs to investors of Sahara Credit and they ought to be allowed to claim it. Moneylife Foundation had attached a list of 240 depositors of Sahara Credit who had provided complete documentation and requested the SEBI chairman and justice BN Agarwal to consider their claims, keeping in mind the spirit and essence of the SC judgement, and in view of the hardship they were suffering during the pandemic. 
 
SEBI did not bother to acknowledge or respond to the letter. Former central information commissioner, Shailesh Gandhi and a colleague filed an application under the Right to Information (RTI) Act which was fobbed off saying that the appropriate regulator is the Credit Cooperative Societies under the ministry of agriculture and farmer’s welfare. Scores of investors writing to SEBI had received similar letters deflecting responsibility. On filing a first appeal under RTI, the public information officer was directed to provide information on our memorandum along with the file notings. The reply, dated 11th June (received 10 days later), said that our memorandum was referred to justice Agarwal who informed SEBI that the Supreme Court order “did not mention about refund of money to investors of Sahara Credit  therefore the refunds cannot be effected by SEBI” to those investors. It further said, “As no further action was warranted, the matter was closed by SEBI.”
 
One expected SEBI to take a considered view of the matter and seek permission from the SC to expand the scope of refunds. But the regulator would rather sit on the money than exert itself to help investors. According to SEBI’s internal notes, contrary to Vivek Aggrawal’s claim, there is ‘no such amount’ of Rs2,253 crore deposited by Subrata Roy. But it admits that “Rs571.96 crore was credited by Sahara Credit” in SEBI’s refund account between 5 June 2014 and 13 June 2014 and has a list of the deposits. SEBI claims “it is not known in what capacity” the deposits were made, since there was no statement accompanying the credit. 
 
While SEBI admits receiving at least Rs571.96 crore, it goes on to claim that Sahara’s counsel appearing before the SRCS on 19 November 2020 was unable to throw any light on the amount paid by Sahara Credit to SEBI. It also says it has now paid out Rs125.17 crore to bond-holders and some applications are pending completion of documents. In effect, Rs16 crore more has been paid out since the last statement to parliament—a drop in the ocean of the massive amounts held by SEBI.
 
A regulator with empathy for investors would have gone back to the SC for a direction but SEBI clearly doesn’t care as is clear from the negative tone of its note.
 
SEBI’s negative-sounding note was placed before justice Agarwal. A hand-written note mentions that “Justice Agarwal was of the view that in the absence of an order of the honourable Supreme Court to refund the money to investors of Sahara Credit, refund cannot be effected by SEBI to investors. Hence the matter may be closed.” 
 
There appears to be a slight but significant difference between what justice Agarwal said and SEBI’s interpretation. Justice Agarwal’s emphasis seems to be the absence of an SC order. The big question is: Who will approach the Supreme Court and apprise it about the new facts and developments? A regulator with empathy for investors would have gone back to the SC for a direction but SEBI clearly doesn’t care as is clear from the negative tone of its note.
 
 
Strangely enough, SEBI is working overtime to collect more money from a seemingly bankrupt group. As recently as in November 2020, SEBI filed a petition in the SC asking the Sahara group to deposit Rs62,600 crore, including interest on the Rs25,700 crore it was ordered to pay (Read: Pay Rs62,600 Crore To Stay out of Jail: SEBI to Saharasri Subrata Roy). It is doing this, knowing full well that there are no funds with Sahara, while investors are pleading to get their money back. Meanwhile, finance minister (FM) Nirmala Sitharaman’s reply to parliament on 15 March 2021 actually makes a very strong case for at least some of Sahara’s beleaguered investors.
 
 
Finance Minister’s Answer in Parliament 
The FM’s written reply said that SFIO has found that Sahara Q Shop Unique Products Range Ltd’s  investments were being converted into other schemes in Saharayan Universal Multipurpose Society Ltd, Sahara Credit Co-operative Societies and two other societies of the group. She also said that the government has received over 17,000 investor complaints against Sahara Q Shop and other group entities. She further revealed that SFIO found that deposits were collected “on false assurance, conversion of investments of Sahara Housing Corporation Ltd and Sahara India Real Estate Corporation Ltd into Sahara Q Shop and other Sahara group companies, and conversion of deposits from Sahara Q Shop to co-operative societies of Sahara Group. There are complaints alleging the conversion of investments of Sahara Housing Corporation Ltd and Sahara India Real Estate Corporation Ltd. The directors of these companies of Sahara have confirmed the conversions during the investigation by SFIO.” (emphasis added). 
 
Meanwhile, finance minister (FM) Nirmala Sitharaman’s reply to parliament on 15 March 2021 actually makes a very strong case for at least some of Sahara’s beleaguered investors.
 
The minister further said that the “fund flow from the realty entities involved in the SEBI case to Sahara Q-shop had been established by SFIO.” This clearly makes a strong case for Q-shop and some of the cooperative societies to get their money back. The question is: Who will bell the cat? Will it be SEBI, whose primary job is to think about investors (according to the preamble to the SEBI Act)? 
 
It was surely never the Supreme Court’s intention that SEBI will sit on the money. Moreover, the regulator is clearly out of ideas and it may be time for SC to set up a committee to collect all valid claims and distribute the money. The big difference today is that there are lakhs of genuine investors who have been duped—unlike in the past when it was impossible to find a Sahara investor.
 
An even bigger mystery is the lack of action against the Subrata Roy and family, many of who are citizens of the Republic of Macedonia and have also duped that nation with false promises (A Son of Indian Billionaire ‘Resides’ in a Modest Post-Communist Building in Macedonia).The bigger question is: Why are some bad-boy billionaires treated differently from others? Why are Subrata Roy, the Sandesara family, Siva Sankaran, Venugopal Dhoot and Anil Ambani given the kid-glove treatment?
 
 

Comments
akhtar.shahnawaj55
3 months ago
I had invested my money near about Rs.1lac.30000 at Sahara India and my maturity date completed in the year 2017 but upto now I am rushing to sahara representatives but they are also having answers from there end.Please help out.
anupkushwaha1995
3 months ago
Hello madam,

My father had invested the money in sahara, maturity date is 2019, we loss him in covid. We need a money for my sister marriage. There is no hope for us. Please help us.
rajkumarshaw560
4 months ago
Mam, i send my commant from kolkata. Mam we are big suffering with our maturity payment who invest in sahara india many schemes. I lot of try to this refund but i'm failure. I read your blog and i hope you will be help me and other depositers. If you anything help me to get back money from sahara india so, please contact us 9831794669. My english is poor, that's better to communicate to hindi. Thank you.
mcguptabalco
4 months ago
I have written many letters for refund of my money I had paid for a flat in Jaipur inSahara city.
They have replied that you will be refunded money but inspite many reminders neither they replied nor refunded the amount.
Ultimatly I was having no solution but take the help of the court. After moving to the court in the year may 13 it took about six years and court directed to pay money with 9% interest. To my surprise even
Sahara group is not bothered for court judgment.
It is requisted to Suprum Court of India Kindly help me to get my refund.
[email protected]
hey.sudhanshuu
5 months ago
My father was agent in sahara india for past 20 years and even after his death last year due to covid , company did not pay us a single penny.
we are poor middle class family .
jpkalra
5 months ago
Your current article has correctly mentioned facts that investors were duped and their investment in realty societies were converted into Q shop and other entities with promise of further good returns without sharing information about SFIO investigation into the matter pertaining to realty companies. You are doing do job on the half of Sahara investors and may bear fruits in years to come. This pressure may force Sahara to bend forward and may refund invested hard earned money without following SEBI escrow account (long channel). We all stand with you in this fight against Sahara. Please share what action or support is required from us in building up pressure and details.
rupangkanbharadwaj22929
5 months ago
Not received any money till date.. Continuously requesting the staff available in local office of my state, the continuously keep on saying when we will receive our fund from sahara head office we will surely contact you to refund you the money. It's almost 4years passed I continuously keeps on reminding them for returning my money.... Hope will get the money soon from Sahara group..
rupangkanbharadwaj22929
5 months ago
Not received any money till date.. Continuously requesting the staff available in local office of my state, the continuously keep on saying when we will receive our fund from sahara head office we will surely contact you to refund you the money. It's almost 4years passed I continuously keeps on reminding them for returning my money.... Hope will get the money soon from Sahara group..
dayaka58
5 months ago
Don't you think It is sometimes Judiciary and regulator induced scams and will be revealed and acted only when some one in power or can manipulate those in power and not in public interest. And if they were to act in public interest these scams would not have happened and repeated. As Judiciary is also interested in protecting all the rights of culprits than doing justice.
ravichandmadtech
5 months ago
Thanks for the information. But in spite of all these things, they are still collecting new policies, till doday they are asking us to convert policies or reinvest for further period. We are waiting for our matured policies from 5 years.
Does the govt. Act immediate on this issue at least now...
ravichandmadtech
5 months ago
Thanks for the information. But in spite of all these things, they are still collecting new policies, till doday they are asking us to convert policies or reinvest for further period. We are waiting for our matured policies from 5 years.
Does the govt. Act immediate on this issue at least now...
singh.amrendra04
5 months ago
Mera April 2022me maturity complete hogaya but abhi amount de Nahi raha hai 2.5 lakh hai bol rahe hai ki Abhi order Nahi aya hai.Sebi
singh.amrendra04
Replied to singh.amrendra04 comment 5 months ago
2021 April
gini021956
5 months ago
I had also invested in Sahara.
Can someone advise where we can submit the claim. The local offices are not working. If you try for claim, they ask you to reinvest in some other scheme but do not pay yr money.
How and where to complain and claim the money
samirkumard56
Replied to gini021956 comment 5 months ago
Please insist otherwise they will not give your money. And don't reinvest your money in this dubious company.
swetaostwal
Replied to samirkumard56 comment 4 months ago
We are not given any other choice rather than re-investing , when we ask them to pay us our invested amount itself the answer is we do not have any money to give now. Your policy is renewed with interest amount and it will mature in 24 months. They do not care at all. They blindly say that we do not have any money to give now. Then how do we even trust that they will pay back after 24 months? It's all a scam and we are left with no other choice rather than accepting renewed policy.
Bhagywant.d
5 months ago
I don't how come people still expect SEBI to return money to them? SEBI is the biggest incompetent authority in India. Investors of Sahara should come together, file case in Supreme Court against SEBI for cheating. Yes, it is cheating. If SEBI has no power to refund money why the hell it has collected money from Sahara? It is clear that SEBI is the biggest fraud in this country. They issue notices to companies, companies are destroyed because on notice from SEBI is enough to spread fear among the investors/depositors of the company and SEBI forget about it. Literally they forget about it. Ask them about Green Ray International Limited , you will know the truth.
Bhagywant.d
5 months ago
I don't how come people still expect SEBI to return money to them? SEBI is the biggest incompetent authority in India. Investors of Sahara should come together, file case in Supreme Court against SEBI for cheating. Yes, it is cheating. If SEBI has no power to refund money why the hell it has collected money from Sahara? It is clear that SEBI is the biggest fraud in this country. They issue notices to companies, companies are destroyed because on notice from SEBI is enough to spread fear among the investors/depositors of the company and SEBI forget about it. Literally they forget about it. Ask them about Green Ray International Limited , you will know the truth.
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